The new U.S. Cold Storage facility is under construction just off I-65 at Highway 2 and Colorado Street near Lowell. Stff photo by John J. Watkins
Cold storage facilities have been flocking to the Region with more than a third of a billion dollars of projects underway.
United States Cold Storage, CoreX and Meats by Linz are collectively planning to invest more than $362 million in Northwest Indiana over the next few years.
Hanson Logistics paved the way for the industry by building a $15 million, 135,000-square-foot cold storage warehouse in the Northwinds Crossing Business Park in Hobart in 2007. It's been expanded a few times since.
"One of the first cold storage facilities I had the pleasure of working on was Hanson Logistics. Back in 2007 they announced their plan for a major cold storage building in the Northwind Crossings Business Park in Hobart," Lake County Economic Alliance Interim CEO Don Babcock said. "Next was US Cold Storage who began pursuing their project at SR - 2 and I-65 back in 2014. The original planned investment was about $30 million. A number of factors including COVID 19 and new technological advances delayed the project until last year. Fortunately for Lake County, the new project is a much larger facility and the investment increased four-fold to $124 million. CoreX recently broke ground on their $93 million cold storage investment in Crown Point. Meats by Linz just completed their 120,000 square foot facility in Hammond."
Meats by Linz recently completed the $38 million plant at the site of the former Queen Ann Candy factory at 628 Hoffman St. Camden, New Jersey-based U.S. Cold Storage, one of the largest frozen food distributors in the United States, picked Lake County as the site for the largest warehouse investment in company history.
"These investments can be attributed to many factors. First, Lake County’s location is within driving distance of 60 percent of the U.S. population and neighboring Chicago. Second, our excellent road infrastructure with I-65, I-80, I-94, and to a lesser extent Cline Avenue and Rt 30 creates a competitive advantage. Third, the state, county, and city’s pro-business approach to supporting these major capital investments has been critical," Babcock said. "Finally, as we grow this market segment, other cold storage companies see the viability of these investments and the supporting workforce that makes them profitable."
Cold storage warehouses tend to be more picky about locations than other logistics companies because it's vital to ensure the food doesn't spoil.
"These facilities are much more complex and expensive than regular warehouses," Babcock said. "They require substantial, reliable, competitive electric power. Power interruptions can cause significant losses in spoiled food, shipping delays and manpower. NIPSCO and other utilities have been key allies. It takes a broad, collaborative, sustained effort to land these multi-million-dollar projects."
CoreX is investing $93 million in a new 215,000-square-foot, five-story-tall building on 38.66 acres at 13450 Mississippi Parkway in Crown Point. Eventually, it plans to expand the project to $200 million through a second and third phase of expansion.
"I believe the increase in demand for cold storage space that Northwest Indiana market is experiencing a surge in cold storage development is driven by a confluence of factors including a booming population, e-commerce expansion and aging existing buildings," said David A. Lasser, principal with Merrillville-based Commercial In-Sites, one of the largest commercial real estate firms in the Region. "The state-of-the-art facilities needed to meet the market are crucial for storing and preserving temperature-sensitive goods, ensuring a steady supply of fresh food and vital products to consumers."
The demand for cold-storage facilities has been growing nationally, Lasser said.
"The pandemic greatly increased e-commerce in the grocery sector. Now that e-commerce in the food industry is widely accepted, more cold storage facilities are required to accommodate the increased demand," he said. "Throughout this market, you have the restaurant chain and grocery supply chain, the retail supply chain and the shift to more and more food that we’re consuming being temperature controlled throughout its life cycle."
Northwest Indiana has been benefiting from the national trend, Lasser said. More cold storage facilities are eying the Region for warehouses.
"We are seeing increased demand and advanced technology to maintain very low temperatures, ensuring the freshness and quality of perishable goods," Lasser said. "Last week we closed a lease transaction where the tenant's product must be kept at -40 degrees. Also, we increasingly talk in terms of cubic footage, not square footage. The taller the building, the more energy efficient the building is, the more product can be stored in the same footprint."
Collectively, U.S. Cold Storage, CoreX and Meats by Linz plans to employ more than 560 workers in Northwest Indiana.
"While industry employment data on Refrigerated Warehousing and Storage specifically isn’t available for Northwest Indiana, we do have data on the broader General Warehousing and Storage industry, which includes cold storage. In this industry, Northwest Indiana has seen explosive growth in the last decade, Indiana University Northwest Assistant Professor of Economics Micah Pollak said. "Today in Lake County, the industry employs over 1,400 workers, or seven times as many as the roughly 200 it employed ten years ago."
The jobs tend to pay slightly better than average.
"In addition, the 2023 average annual pay for warehousing jobs in Lake County was $52,000, or slightly above the $50,000 average annual pay across all service-providing jobs in the county," Pollak said. "Through the jobs it provides, the warehousing industry, including cold storage, plays a significant and growing role in the economy of Northwest Indiana."
Northwest Indiana has long been a logistics hub due to its location near the country's third largest metropolitan area and extensive infrastructure, Pollak said.
"Northwest Indiana has many features which make it an excellent logistics hub," he said. "The location is both convenient in terms of access to transportation with many major highways, rail lines, airports, and ports, and in its proximity to Chicago. Coupled with the availability of relatively low-cost land, the Region is increasingly being recognized by logistics companies as a desirable location for warehousing, particularly for perishable products which may need cold storage."
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